Tax Rates. The current maximum marginal tax rate is 37%. After the TCJA sunsets, the maximum rate will revert to 39.6%. 

Long term Capital Gains Rates. Long term capital gain brackets will no longer be decoupled from ordinary income tax brackets resulting in higher tax for individuals in higher income brackets. The capital gains tax rates will be 0%, 15%, and 20%. 

Standard Deduction. Under the TCJA, many individuals have not itemized deductions as the standard deduction has been almost two times the amount under pre-TCJA law. Below is a summary of the standard deduction changes: 

 State and Local Tax (“SALT”). The $10,000 limitation on the state and local tax deduction (the “SALT Cap”) will no longer apply.  State and local income or sales tax, and real and personal property taxes will revert to being fully deductible; however, the deduction benefit may be limited by other considerations such as the Alternative Minimum Tax.   

Charitable Contributions. Under the TCJA, charitable cash contributions are limited to 60% of the taxpayer’s Adjusted Gross Income (“AGI”).  After TCJA sunsets, the limitation will revert to 50% of AGI.  

Child Tax Credit. The current credit of $2,000 per child will revert to $1,000 per qualifying child with the phase out income levels as before. 

Miscellaneous Itemized Deductions. Currently, no deduction is allowed for expenses previously qualifying as miscellaneous itemized deductions. After the TCJA sunsets, taxpayers that itemize deductions will be able to deduct miscellaneous itemized deductions in excess of 2% of AGI, such as investment/advisory fees, certain legal fees, and unreimbursed employee expenses.  

Mortgage Interest Deduction. The limitation currently is $750,000 for joint returns ($375,000 for single) and interest generally is suspended for home equity loans.  The limitation is raised to $1,000,000 ($500,000 single) and up to $100,000 ($50,000 single) of qualifying home equity indebtedness with the expiration of TCJA. 

Personal Exemptions. The personal exemption was suspended under the TCJA. After the TCJA sunsets, taxpayers will be able to claim a personal exemption for themselves and their dependents.  In 2026, the personal exemption would be valued at $5,300. Note, exemptions are subject to phase outs at higher income levels. 

AMT Exemption. The alternative minimum tax (“AMT”) phase out level was increased under the TCJA and less individuals were subject to the tax. After the TCJA sunsets, these increased exemptions will revert to previous levels, and there is anticipation that more taxpayers may be subject to the tax as there will be a lower AMT exemption. 

Corporate Tax Rate.  The top corporate tax rate is anticipated to continue to be 21% as this change will not expire. However, even though the corporate tax rate was made permanent, this can potentially change with new tax legislation. 

Qualified Business Income (“QBI”) Deduction.  This deduction will no longer be available in 2026 after the TCJA sunsets. This is a highly impactful expiring provision that will affect owners of passthrough entities.

Bonus Depreciation. Still in place for tax year 2026, but at a reduced rate of 20% for qualifying property (new and used). It is set to expire for property placed in service after December 31, 2026 (i.e., 0 %).  

International. 

• • Global Intangible Low-Taxed Income (GILTI). The effective tax rate on GILTI is currently reduced by a 50% deduction under IRC § 250, which results in an effective tax rate of 10.5% (half of the 21% corporate tax rate). This deduction is set to decrease to 37.5%, increasing the effective tax rate on GILTI to 13.125%. The increase in the effective tax rate on GILTI may result in higher tax liabilities for U.S. shareholders of Controlled Foreign Corporations. Please note that the effective tax rate on GILTI is influenced by the availability of the § 250 deduction and the Foreign Tax Credit.  

  • Foreign-Derived Intangible Income (FDII). The current deduction for FDII is 37.5%. The deduction will decrease to 21.875%, resulting in an effective tax rate of 16.40625%.  

  • Base Erosion and Anti-Abuse Tax (BEAT). The BEAT rate is scheduled to increase to 12.5%. The increase in the BEAT rate may result in higher tax liabilities for affected corporations.